DIGIVESTASI - The Asia-Pacific stock market experienced an increase at the opening of trading today ahead of the release of China's Manufacturing PMI. The Nikkei index strengthened after the Japanese government injected a large fund to stabilize the value of the yen.

Japan's Nikkei 225 index opened up by 1.01%, while the broader Topix index increased by 1.02%. In Australia, the S&P/ASX 200 index rose by 0.78%.

South Korea's Kospi stock index rose by 1.26%, and the smaller-cap Kosdaq index increased by 0.42%.

Hang Seng index futures in Hong Kong were at 18,081, indicating a slightly higher opening compared to the HSI's close at 18,079.61.

According to consensus gathered by Trading Economics, China's Manufacturing PMI for May is expected to rise slightly to 51.5 from 51.4 the previous month. This indicates that China's manufacturing sector remains in expansion territory.

Japan has spent a record 9.8 trillion yen or around Rp1.013 trillion (at an exchange rate of Rp103.37 per yen) in the past month to support the yen after it fell to its lowest level in 34 years against the US dollar. This figure exceeds interventions in 2022 to maintain its currency.

The Japanese Ministry of Finance revealed that the amount was spent during the period from April 26 to May 29. This figure surpasses the previous estimate of 9.4 trillion yen or Rp972 trillion based on Bank of Japan account forecasts and money brokers, as well as expenditures of 9.2 trillion yen or Rp951 trillion for all interventions in 2022.

This record expenditure demonstrates the Japanese government's commitment to combating speculators betting against the yen. The large amount also highlights the scale of action needed to have a short-term impact on the market.

"The amount indeed looks large, but most of it falls within the expected range," said Hirofumi Suzuki, head of foreign exchange strategy at Sumitomo Mitsui Banking Corp. "It didn't exceed ¥10 trillion, so it didn't feel too big, and the dollar-yen pair didn't really react much."

The yen fell by around 0.3% to 157.25 against the US dollar in Friday's trading (May 31, 2024). Over the past year, the yen has depreciated by 11.52% against the US dollar.

The yen is expected to remain under pressure given the widening gap between interest rates in Japan and the United States. Although the Bank of Japan has eventually joined the Federal Reserve in tightening monetary policy, Japan's short-term interest rates are still only 0.1% compared to 5.5% in the US.

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